Healthcare innovator Novo Nordisk (NYSE:NVO) is a pharmaceutical company with one major difference. Based in Denmark, Novo Nordisk specializes in diabetes care but also works on chronic ailments including rare blood and endocrine disorders as well as obesity. And while the bull run in NVO stock was impacted by Covid-19, the momentum appears to be picking up again.
The months of March and April were particularly challenging, as lockdowns were newly implemented in many American states and abroad.
The “return to normal,” if such a thing exists anymore, has been gradual. Healthcare companies must be proactive and responsive in order to maintain the trust of their shareholders.
Novo Nordisk has risen to the occasion, maintaining its operations across the value chain. This responsiveness has empowered Novo Nordisk stockholders to hold their shares with confidence.
Novo Nordisk Stock at a Glance
Both income-focused investors and value seekers should be pleased with Novo Nordisk stock.
For one thing, the stock offers a forward annual dividend yield of 1.52%. That’s not too bad, as far as health care stocks go. Along with that, Novo Nordisk stock has a trailing 12-month price-to-earnings ratio of 28.03.
In a stock universe with some very high P/E ratios, NVO’s P/E ratio is reasonable and suggests that the shares aren’t overpriced.
It’s also nice to know that Novo Nordisk stock isn’t particularly volatile. In fact, NVO’s five-year monthly beta is a mere 0.33. This means that the stock moves slowly in both directions when compared to the benchmark index, the S&P 500.
Therefore, it should be no surprise that Novo Nordisk stock has progressed in a slow but steady manner since bottoming out in March. The impact of the novel coronavirus can be detected in the share price, but the recovery has been impressive without indicating that NVO is in a bubble.
Some traders might be surprised to learn that Novo Nordisk is a truly international company. Sure, it’s headquartered in Denmark, but Novo Nordisk is known for developing medical solutions for diabetes, obesity and other disorders on a global scale.
Believe it or not, Novo Nordisk provides 50% of the world’s insulin supply. Moreover, 30 million people use the company’s diabetic care products.
Furthermore, Novo Nordisk has produced 1 billion insulin pens, and the company conducts clinical trials in more than 50 countries across the globe.
This broad geographic reach has undoubtedly helped Novo Nordisk to thrive. For instance, consider the company’s once-per-week injectable treatment for diabetes, known as Ozempic. In 2019, Novo Nordisk generated in $1.7 billion from Ozempic, a vast improvement over the $264 million generated in 2018.
Don’t get the wrong impression, as Novo Nordisk is faring well in the U.S. But it’s this company’s geographic spread that’s kept the company in good stead throughout 2020.
In this vein, Novo Nordisk posted International Operations sales growth of 12% at constant exchange rates (CER) during the first half of 2020. Furthermore, that sales growth was driven by multiple segments at Novo Nordisk: insulin, obesity, biopharm, etc.
During the same timeframe, Novo Nordisk’s North American Operations sales only increased 1%. This is nothing to be ashamed of, as many businesses struggled to survive during this chaotic time.
Nevertheless, these numbers underscore the benefits of maintaining significant operations abroad. As long as the world needs insulin, Novo Nordisk will continue to produce it without compromising quality or efficiency.
There’s been a slow but steady increase in the Novo Nordisk stock price, but not every investor is seeking excitement. Besides, NVO offers a good value in a time when value is hard to find.
Thus, for a low-beta health care winner with international exposure, Novo Nordisk stock is an outstanding pick.
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Source: Investor Place